Mastercard has announced it is teaming up with Paxos to handle compliance and security for banks that want to launch crypto trading. The program will act as a “bridge” between crypto trading platform Paxos and banks, the company said. There’s a lot of consumers out there that are really interested in this, and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions,” said Jorn Lambert, chief digital officer of Mastercard, in an interview with CNBC.
Customers have also expressed skepticism. Since January, the industry has experienced billion-dollar cyberattacks as well as numerous high-profile bankruptcies. The payments provider claimed that by adhering to crypto compliance guidelines, confirming transactions, and offering anti-money-laundering and identity monitoring services, it can keep banks in compliance with regulations and remove some of this skepticism over time.
Mastercard will pilot the product in the first quarter of next year, then “crank the handle” to expand in more geographies. Lambert declined to say which banks have signed up so far. Although the sector is currently experiencing a bear market or "crypto winter," Lambert stated that in the future, increased activity may result in more transactions, which would support Mastercard's main business.
“It would be shortsighted to think that a little bit of a crypto winter heralds the end of it -- we don’t see that,” he said. “As regulation comes in, there is going to be a higher degree of security available to the crypto platforms and we’ll see a lot of the current issues getting resolved in the years to come.”